EXHIBIT 10.11
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated _______________, ___, ___, is made by and between
Empi, Inc., a Minnesota corporation (the "Company"), and ________________, an
employee of the Company (or one of its Subsidiaries, as defined herein),
hereinafter referred to as "Optionee."
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its common stock, par value $0.01 per share (the "Common
Stock"); and
WHEREAS, the Company wishes to carry out the 1999 Stock Option Plan of
Empi, Inc. (the "Plan") (the terms of which are hereby incorporated by reference
and made a part of this Agreement); and
WHEREAS, the Committee appointed to administer the Plan has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the Incentive Stock Option provided for herein to the
Optionee as an inducement to enter into or remain in the service of the Company
(or one of its Subsidiaries) and as an incentive for increased efforts during
such service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. Capitalized terms used in this Agreement and not defined below shall
have the meaning given such terms in the Plan. The singular pronoun shall
include the plural, where the context so indicates.
Section 1.1 Cash Flow; Cumulative Cash Flow
"Cash Flow" for a given fiscal year shall mean (i) EBITDA for such
period minus (ii) consolidated capital expenditures actually paid during such
period, plus (iii) the Net Change In Working Capital for such period.
"Cumulative Cash Flow" as of a given date shall mean the total of Cash Flow from
and after September 1, 1999 through such date.
Section 1.2 Cash Flow Target; Cumulative Cash Flow Target
"Cash Flow Target" and "Cumulative Cash Flow Target" for a given period
shall be as set forth in Appendix A to this Agreement, subject to the provisions
of Section 4.6.
Section 1.3 Determination Date
"Determination Date" with respect to a given fiscal year shall mean a
date, no later than 90 days following December 31/st/ of such year, as of which
the Committee determines, pursuant to Section 3.1(e) herein, that a Cash Flow or
Cumulative Cash Flow Target has been met with respect to such fiscal year.
Section 1.4 EBITDA
"EBITDA" for a given period shall mean consolidated earnings before
taxes, interest, amortization, depreciation and extraordinary items, all as
reflected on the Company's audited consolidated financial statements for such
period.
Section 1.5 Investor Return.
"Investor Return" as of the date of a Liquidity Event shall mean the
annual compounded pre-tax internal rate of return on the aggregate amount of
funds invested by the Principal Stockholder in debt and equity securities or
instruments of the Company and its Subsidiaries through such date of
determination, assuming exercise of all options outstanding as of such date
(after giving effect to different dates of investment, if any, and after giving
effect to any dilution of such securities or instruments arising in connection
with such Liquidity Event).
Section 1.6 Liquidity Event.
"Liquidity Event" shall mean the first occurrence of the sale,
transfer, conveyance or other disposition, in one or a series of related
transactions, of the debt and equity securities of the Company held by the
Principal Stockholder such that immediately following such transaction (or
transactions), the value (at original cost) of all debt and equity securities
held by the Principal Stockholder is less than 20% of the value (at original
cost) of the debt and equity securities held by the Principal Stockholder as of
August 31, 1999.
Section 1.7 Net Change In Working Capital; Average Working Capital
"Net Change In Working Capital" for any given fiscal year shall mean
(i) the Average Working Capital for the immediately preceding fiscal year minus
(ii) the Average Working Capital for such fiscal year, where "Average Working
Capital" for a given fiscal year shall mean the result of:
(a) the sum of the four quarterly working capital amounts (excluding
cash and short term borrowings) determined as of the last day of each calendar
quarter of such fiscal year, all as determined on a consolidated basis for the
Company and its subsidiaries,
divided by
(b) four;
provided, however, that for purposes of this Section 1.7, fiscal year 2000 shall
mean the period beginning October 1, 1999 and ending December 31, 2000; Average
Working Capital for fiscal year 2000 shall mean the result of (x) the sum of the
five quarterly working capital amounts (excluding cash and short term
borrowings) determined as of the last day of each calendar quarter during such
period, all as determined on a consolidated basis for the Company and its
subsidiaries, divided by (y) five; and "Net Change in Working Capital" for
fiscal year 2000 shall mean the consolidated working capital (excluding cash and
short term borrowings) of the Company and its Subsidiaries as of August 31, 1999
minus Average Working Capital for fiscal year 2000.
Section 1.8 Option
"Option" shall mean the Incentive Stock Option to purchase Common Stock
granted under this Agreement.
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Section 1.9 Person
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
Section 1.10 Plan
"Plan" shall mean the 1999 Stock Option Plan of Empi, Inc.
Section 1.11 Principal Stockholder.
"Principal Stockholder" shall mean, collectively, MPI Holdings, L.L.C.
and any of its Permitted Assignees (as such term is defined in that certain
Shareholder Voting and Control Agreement by and among the Company, GE Capital
Equity Investments, Inc. and MPI Holdings, L.L.C.).
Section 1.12 Subsidiary
"Subsidiary" of any entity shall mean any corporation in an unbroken
chain of corporations beginning with such entity if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Section 1.13 Stockholders Agreement
"Stockholders Agreement" shall mean that certain agreement by and
between the Optionee and the Company which contains certain restrictions and
limitations applicable to the shares of Common Stock acquired upon Option
exercise (and, possibly, to other shares of Common Stock held by the Optionee),
substantially in the form of Exhibit A attached hereto. The Committee, in its
discretion, shall determine the terms of the Stockholders Agreement. If no
Stockholders Agreement is effective at the time of exercise of the Option (or
any portion thereof), the exercise of the Option shall be subject to the
condition that the Optionee enter into such an agreement with the Company.
ARTICLE II.
GRANT OF OPTION
Section 2.1 Grant of Option
In consideration of the Optionee's agreement to remain in the employ of
the Company or one of its Subsidiaries and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Optionee
the Option to purchase any part or all of an aggregate of ____________ shares of
Common Stock upon the terms and conditions set forth in the Plan and this
Agreement. The Optionee hereby agrees that except as required by law, he or she
will not disclose to any person other than the Optionee's spouse (if any) the
grant of the Option or any of the terms or provisions hereof without the prior
approval of the Committee, and the Optionee agrees that, in the discretion of
the Committee, the Option shall terminate and any unexercised portion of such
Option (whether or not then exercisable) shall be forfeited if the Optionee
violates the non-disclosure provisions of this Section 2.1.
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Section 2.2 Option Subject to Plan
The Option granted hereunder is subject to the terms and provisions of
the Plan, including without limitation, Article V and Sections 7.1, 7.2 and 7.3
thereof.
Section 2.3 Option Price
The purchase price of the shares of Common Stock covered by the Option
shall be $9.85 per share (without commission or other charge).
ARTICLE III.
EXERCISABILITY
Section 3.1 Commencement of Exercisability
(a) Subject to subsections (e) and (f) and Section 3.3, 25% of the
Option shall become exercisable in five equal and cumulative installments as
follows:
(i) The first installment shall consist of five percent of
the shares covered by such Option and shall become exercisable on December 31,
2000;
(ii) The second installment shall consist of five percent of
the shares covered by such Option and shall become exercisable on December 31,
2001;
(iii) The third installment shall consist of five percent of
the shares covered by such Option and shall become exercisable on December 31,
2002;
(iv) The fourth installment shall consist of five percent of
the shares covered by such Option and shall become exercisable on December 31,
2003;
(v) The fifth installment shall consist of five percent of
the shares covered by such Option and shall become exercisable on December 31,
2004.
(b) Subject to subsections (e) and (f) and Section 3.3, 75% of the
Option shall become exercisable in full on the day immediately preceding the
tenth anniversary of the date of grant provided that the Optionee remains
continuously employed in active service by the Company from the date of grant
through such date.
(c) Notwithstanding Section 3.1(b), but subject to subsections (e)
and (f) Section 3.3,
(i) An installment consisting of 10% of the shares covered by
the Option shall become exercisable on the Determination Date for each fiscal
year 2000 through 2004 if the Cash Flow for such fiscal year equals or exceeds
the Cash Flow Target for such year.
(ii) If any installment subject to accelerated exercisability
pursuant to Section 3.1(c)(i) fails to become exercisable in accordance
therewith, such installment shall become exercisable on the Determination Date
following for the first fiscal year ending on or prior to December 31, 2005 as
of which (A) the Cash Flow for such fiscal year equals or exceeds the Cash Flow
Target for such year, and (B) the Cumulative Cash Flow as of the last day of
such fiscal year equals or exceeds the Cumulative Cash Flow Target for such
date.
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(d) Notwithstanding Section 3.1(b), but subject to subsection (f) and
Section 3.3, an installment consisting of 25% of the shares covered by the
Option shall become exercisable upon the occurrence of the first Liquidity Event
as of which the Investor Return equals or exceeds 30%.
(e) Notwithstanding the foregoing, but subject to subsection (f) and
Section 3.3., that portion, if any, of the 75% of the Option subject to vesting
under subsections (a) and (c) that has not then become exercisable or expired,
shall become exercisable in full as of the occurrence of the first Liquidity
Event.
(f) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
(g) The Committee shall make the determination as to whether the
respective Cash Flow Targets and Cumulative Cash Flow Targets have been met with
respect to any fiscal year, and shall determine the extent, if any, to which the
Option has become exercisable no later that the Determination Date for such
year.
Section 3.2 Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable.
Section 3.3 Expiration of Option
The Option may not be exercised to any extent by anyone after the first
to occur of the following events:
(a) The expiration of ten years from the date the Option was granted;
or
(b) In the case of an Optionee owning (within the meaning of Section
424(d) of the Code), at the time the Incentive Stock Option was granted, more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary corporation, the expiration of five years from the
date the Incentive Stock Option was granted; or
(c) Except as the Committee may otherwise approve, the 90th day
following the date of the Optionee's Termination of Employment for any reason
other than (x) termination by the Company for "cause" as determined by the
Committee in its discretion, (y) the Optionee's death or disability (as defined
in Section 22(e)(3) of the Code); or
(d) Except as the Committee may otherwise approve, the date of the
Optionee's Termination of Employment by reason of termination by the Company for
"cause" as determined by the Committee in its discretion; or
(e) In the case of an Optionee whose Termination of Employment is by
reason of his or her disability (within the meaning of Section 22(e)(3) of the
Code), the expiration of 12 months from the date of the Optionee's Termination
of Employment, unless the Optionee dies within said 12 month period, in which
case the Option shall cease to be exercisable upon the expiration of 180 days
from the date of the Optionee's death; or
(f) The expiration of 180 days from the date of the Optionee's
Termination of Employment by reason of his or her death.
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Section 3.4 Partial Exercise
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable; provided,
however, that each partial exercise shall be for not less than one hundred (100)
shares (or the minimum installment set forth in Section 3.1(c), if a smaller
number of shares) and shall be for whole shares only.
Section 3.5 Exercise of Option
The exercise of the Option shall be governed by the terms of this
Agreement and the terms of the Plan, including, without limitation, the
provisions of Article V of the Plan.
Section 3.6 Special Tax Consequences
The Optionee acknowledges that, to the extent that the aggregate fair
market value of stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to Section 422(d) of
the Code), including the Option, are exercisable for the first time by the
Optionee during any fiscal year (under the Plan and all other stock option plans
of the Company, any Subsidiary and any parent corporation) exceeds $100,000,
such options shall be treated as not qualifying under Section 422 of the Code
but rather shall be treated and taxable as non-qualified options. The Optionee
further acknowledges that the rule set forth in the preceding sentence shall be
applied by taking options into account in the order in which they were granted,
and the stock certificate issued upon exercise of options shall designate
whether such stock was acquired upon exercise of an Incentive Stock Option. For
purposes of these rules, the fair market value of stock shall be determined as
of the date of grant of the applicable option covering such stock.
ARTICLE IV.
OTHER PROVISIONS
Section 4.1 Not a Contract of Employment
Nothing in this Agreement or in the Plan shall confer upon the Optionee
any right to continue in the employ of the Company or any of its Subsidiaries or
shall interfere with or restrict in any way the rights of the Company or its
Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without cause.
Section 4.2 Shares Subject to Plan and Management Stockholders Agreement
The Optionee acknowledges that any shares acquired upon exercise of the
Option are subject to the terms of the Plan and the Stockholders Agreement
including without limitation, the restrictions set forth in Section 5.6 of the
Plan.
Section 4.3 Construction
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Minnesota.
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Section 4.4 Conformity to Securities Laws
The Optionee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated thereunder by the Securities
and Exchange Commission, including without limitation Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Option is granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed amended
to the extent :necessary to conform to such laws, rules and regulations.
Section 4.5 Stockholder Approval
This Agreement will be effective upon approval by the stockholders of
the Company as provided in Section 280G(b)(5)(A)(ii) of the Code and regulations
thereunder as if a "change in control" occurred immediately following the date
such approval is obtained. This Option may not be exercised to any extent by
anyone unless and until the Agreement is so approved by the Company's
stockholders, and if such approval has not been obtained by the end of the
twelve-month period beginning on the date hereof, this Option shall thereupon be
canceled and become null and void. The Company shall take such actions as may be
necessary to satisfy any applicable requirements of Rule 16b-3(b).
Section 4.6 Adjustments in Cash Flow Targets
The Cash Flow Targets and Cumulative Cash Flow Targets specified in
Appendix A are based upon certain revenue and expense assumptions about the
future business of the Company as of the date the Option is granted.
Accordingly, in the event that, after such date, the Committee determines, in
its sole discretion, that any acquisition or any divestiture of any business or
any product by the Company or any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, any unusual or nonrecurring transactions or events
affecting the Company, or the financial statements of the Company, or change in
applicable laws, regulations, or accounting principles occurs such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to the Option, then the Committee
shall, in good faith and in such manner as it may deem equitable, adjust the
financial targets set forth on Appendix A to reflect the projected effect of
such transaction(s) or event(s) on Cash Flow.
(Signature Page Follows)
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IN WITNESS WHEREOF, this Incentive Stock Option Agreement has been
executed and delivered by the parties hereto.
EMPI, INC.
By:
Title:
__________________________________________________
Xxxxxxx X. Xxxxxxxx
Executive Vice President & Chief Financial Officer
__________________________
Optionee
__________________________
__________________________
Address
Taxpayer Identification Number:______________________
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EXHIBIT A
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (the "Agreement") is entered into as of this
___ day of _____________, 19__ by and between EMPI, Inc., a Minnesota
corporation (the "Company"), and __________________ ("Optionee").
Recitals:
WHEREAS, the Company (i) pursuant to the 1999 Stock Option Plan of EMPI,
Inc. (the "Plan") or otherwise, has granted to certain employees and/or
independent directors of the Company and/or its subsidiaries, including
Optionee, options to purchase shares of the common stock, par value $0.01 per
share, of the Company (the "Common Stock") and (ii) as of the date hereof will
issue, or may in the future issue, to Optionee shares of Common Stock pursuant
to the exercise of such options (all of the shares of Common Stock acquired by
Optionee during the term of this Agreement by exercise of options or otherwise,
being referred to collectively as the "Restricted Shares");
WHEREAS, as a condition to the issuance of the Restricted Shares to
Optionee under the terms of the option, the Company and Optionee are entering
into this Agreement to provide for certain matters with respect to the ownership
and transfer of the Restricted Shares by Optionee; and
WHEREAS, this Agreement is one of several substantially identical
agreements which have been, or which in the future will be, entered into by the
Company and independent directors and employees of the Company and/or its
subsidiaries who may hold shares of Common Stock.
Agreement:
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section 1. Restrictions on Transfer. Optionee shall not sell, assign,
transfer, convey, pledge or otherwise dispose of (collective, a "Transfer") any
Restricted Shares without the prior written consent of the Company, which
consent shall have been authorized by a majority of the members of the board of
directors of the Company (the "Board"); provided, however, that this Section 1
shall not prevent the Transfer of any Restricted Shares by will or pursuant to
laws of descent and distribution. Any purported Transfer in violation of the
provisions of this Section 1 shall be null and void and shall have no force or
effect.
Section 2. Rights to Repurchase Shares.
(a) For a period a nine (9) months following the Termination of
Employment of Optionee (as defined below), the Company shall have the option to
repurchase all
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(but not less than all) of the Restricted Shares held by Optionee or his or her
successor in interest (the "Call Right"). The repurchase price payable by the
Company upon exercise of the Call Right (the "Repurchase Price") shall be the
fair market value of the Restricted Shares subject to the Call Right, as
determined on the date of the Call Notice (as defined below). The Call Right
shall be exercised by written notice (the "Call Notice") to Optionee or, in the
event of Optionee's death, Optionee's Eligible Representative (as defined in the
Plan) given within nine (9) months after the Termination of Employment of
Optionee. "Termination of Employment of Optionee" shall mean the time when the
employee-employer relationship between Optionee and the Company or one of its
subsidiaries is terminated for any reason, with or without cause, including, but
not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding termination where there is a simultaneous reemployment
by the Company or one of its subsidiaries.
(b) The repurchase of Restricted Shares pursuant to the exercise of a
Call Right shall take place on a date specified by the Company, but in no event
later than thirty (30) days following the date of the Call Notice. On such date,
Optionee or Optionee's Eligible Representative (as applicable) shall deliver to
the Company the certificates representing the Restricted Shares to be purchased,
duly endorsed for transfer to the Company, and the Company shall pay to Optionee
or Optionee's Eligible Representative (as applicable) the Repurchase Price in
cash or by bank or cashier's check. The Company and Optionee or Optionee's
Eligible Representative (as applicable) shall each use its reasonable efforts to
expedite all proceedings contemplated hereunder in order to facilitate a
repurchase of the shares hereunder.
(c) The fair market value of the Restricted Shares to be repurchased
shall be determined in accordance with the procedures described in Section
4.3(b) of the Plan, as of the date of the Call Notice.
(d) In the event that, pursuant to the terms of the relevant option
agreements or otherwise, any Restricted Shares are issued to Optionee (or his or
her successor in interest) following the Termination of Employment of Optionee
("Subsequently Issued Shares"), then the Company shall also have an additional
Call Right with respect to such Subsequently Issued Shares, which Call Right
must be exercised as to such Subsequently Issued Shares within nine (9) months
of the issuance thereof (and which shall otherwise be subject to the provisions
set forth above).
Section 3. Company Sale.
(a) If the Board and the holders of a majority of the outstanding
shares of Common Stock approve a Company Sale (as defined below), Optionee shall
consent to and raise no objections against such Company Sale, and if the Company
Sale is structured as a sale of stock, Optionee will sell all or any portion of
the Restricted Shares on the terms and conditions approved by the Board and the
holders of a majority of the outstanding shares of Common Stock. Optionee will
take all actions that the Board and the holders of a majority of the outstanding
shares of Common Stock reasonably deem necessary or desirable in connection with
the consummation of such Company Sale, including without limitation, voting the
Restricted Shares in favor of such Company Sale and refraining from the exercise
of dissenters' appraisal rights with respect to such Company Sale.
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(b) If the Company or the holders of the Company's securities enter
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated under the Securities Act of 1933, as amended (the "Act"),
may be available with respect to such negotiation or transaction (including a
merger, consolidation or other reorganization), Optionee will, if requested by
the Company, appoint a purchaser representative (as such term is defined in Rule
501 of the Act) reasonably acceptable to the Company. If Optionee appoints a
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if Optionee declines to appoint the
purchaser representative designated by the Company, Optionee will appoint
another purchaser representative (reasonably acceptable to the Company), and
Optionee will be responsible for the fees of the purchaser representative so
appointed.
(c) Optionee will bear Optionee's pro-rata share (based upon the
number of shares held by such holders that are sold) of the costs of any sale of
Common Stock pursuant to a Company Sale to the extent such costs are incurred
for the benefit of all holders of Common Stock and are not otherwise paid by the
Company or the acquiring party.
For the purpose hereof, "Company Sale" means the consummation of the sale
to any person or entity which, at the time of such sale, does not hold five
percent (5%) or more of the outstanding shares of the Common Stock and is not an
Affiliate (as defined in the Plan) of any such person or entity, pursuant to
which such party or parties acquire (i) capital stock of the Company possessing
the voting power sufficient to elect a majority of the members of the Board
(whether such acquisition is effected by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of the
assets of the Company and its subsidiaries.
Section 4. Miscellaneous.
(a) Legend. Each certificate representing the Restricted Shares will
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SAID LAWS OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF."
(b) Additional Legend. In addition to the foregoing, each certificate
representing Restricted Shares will bear the following legend:
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO ADDITIONAL RESTRICTIONS
ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN THE MANAGEMENT
STOCKHOLDERS AGREEMENT BETWEEN THE ISSUER AND THE INITIAL HOLDER HEREOF
DATED AS OF ________ __, 199_. A
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COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUE TO THE
HOLDER HEREOF UPON WRITTEN REQUEST."
Optionee hereby agrees that Optionee will not Transfer any Restricted Shares
without complying with each of the restrictions set forth herein and agrees that
in connection with any such Transfer Optionee will, if requested by the Company,
deliver to the Company an opinion of counsel in form and substance reasonably
satisfactory to the Company and counsel for the Company, to the effect that such
Transfer is not in violation of this Agreement or the securities laws of the
United States of America or any state thereof.
(c) Successors, Assigns and Transferees. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, heirs, legatees, successors and assigns and any other
transferee of the Restricted Shares and shall also apply to any Restricted
Shares acquired by Optionee after the date hereof.
(d) Specific Performance, Etc. The Company and Optionee, in addition
to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, will be entitled to specific performance of its
or his or her rights under this Agreement. The Company and Optionee agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by either of the provisions of this Agreement and each hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
(f) Interpretation. The headings of the Sections contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not affect the meaning or interpretation of this
Agreement.
(g) Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given and received when delivered by overnight courier or hand delivery, when
sent by telecopy, or five days after mailing if sent by registered or certified
mail (return receipt requested) postage prepaid, to the parties at the following
addresses (or at such other address for any party as shall be specified by like
notices, provided that notices of a change of address shall be effective only
upon receipt thereof).
(i) If to the Company:
EMPI, Inc.
000 Xxxxxxxx Xxxx
Xx. Xxxx, XX 00000-0000
Attn: General Counsel
with copies to:
00
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(ii) If to Optionee, to the address set forth on the signature
page hereto.
(h) Recapitalization, Exchange, Etc. Affecting the Company's Stock.
The provisions of this Agreement applicable to the Common Stock shall also
apply, to the full extent set forth herein, with respect to any and all shares
of capital stock of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) that may be
issued in respect of, in exchange for, or in substitution of such Common Stock
and shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, recapitalizations and the like occurring after the date
hereof.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to constitute one and the same agreement.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, the successful party shall be entitled to
recover reasonable attorneys' fees in addition to any other available remedy.
(k) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired thereby.
(l) Amendment. This Agreement may be amended only by written
agreement signed by Optionee and the Company.
(m) Tax Withholding. The Company and/or its subsidiaries shall be
entitled to require payment in cash or deduction from other compensation payable
to Optionee of any sums required by federal, state or local tax law to be
withheld with respect to the issuance, vesting, exercise, repurchase or
cancellation of any Restricted Share or any option to purchase Restricted
Shares.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
EMPI, INC.
By:________________________________
Name: __________________________
Title:__________________________
Accepted and agreed to:
Name:______________________________
Address:___________________________
___________________________________
___________________________________
___________________________________
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